As Shared Services organizations demonstrate to the senior leadership within their company the ability to optimize processes and drive out waste, the opportunity often can arise to expand its scope of services into less traditional areas of the company, such as Financial Planning & Analysis, Facilities, Office Services, and Supply Chain Finance, to name just a few of the potential candidates. As the typical Shared Services functions, such as Accounts Payable, Fixed Assets, and Payroll, continue to become increasingly automated through the application of advanced process design and technology, expansion into additional process areas will not only result in the customary results of cost reduction and increased productivity, but will also ensure the continued viability of the Shared Services operation as a whole.
On a recent Peeriosity PeercastTM, a global consumer products company with a Shared Services operation that provides 170 services across 75 countries shared its experiences in adding the Financial Planning & Analysis (FP&A) function to it service offering. As is the case with many companies, the existing FP&A process required a high level of effort that often resulted in a low level of accuracy. This impacted the real-time decision-making capabilities of the company, which could result in costly mistakes being made due to a lack of proper information.
The vision for FP&A in Shared Services was created, with the four key tenets for the business planning being 1) Continuous, 2) Rolling, 3) Real Time, and 4) Integrated. The key design principles for the newly transitioned function included:
- Success primarily measured on actuals vs. prior year results
- Targets set by product line
- Profit forecast is separate from Target
- Forecast is the best estimate (i.e., a 50/50 estimate) of current business plans
- Transparent forecasts
The actual transition went from a region-focused structure with much of the cost forecasting being handled by individuals in the various plants and business units across the world to a consolidated global forecasting team with standardized capabilities and processes. This Shared Services team now prepares and publishes the forecast, processes and publishes the actuals, and reconciles the variances between the two. Support is provided for this process out of three regional service centers located in Latin America, Europe, and the Philippines. This allows for the use of a “Follow the Sun” support model, which provides 24 x 5 coverage (24 hours a day, 5 days a week), daily hand over meetings to transition issue resolution and processing work between regions, and business continuity coverage as each region can back up the others.
Associated with this Peercast was a poll created using Peeriosity’s iPollingTM technology. The first question addressed the status at companies in expanding their Shared Services model to include services outside what is considered as “traditional”. Looking at the results, 19% have already implemented this approach, with another 31% that either have a plan in place and are already implementing as part of it or are working on developing plans to do so. Important to note in the results is that just 19% of the companies don’t have this on their radar screen at the present time.
The second poll question then looked at the likelihood that companies will be expanding their scope to include less-traditional services within the next five years. Reviewing the results, 51% of the companies have either already broadened their scope or consider it very likely that they will accomplish this within a five-year time frame, while 44% say it is somewhat likely. Just 5% of the companies indicated that this scenario was not likely.
What plans does your company’s Shared Services operation have to provide non-traditional services? What is the likelihood that this will take place within the next five years?
Who are your peers and how are you collaborating with them?
“PeercastsTM” are private, professionally facilitated webcasts that feature leading member company experiences on specific topics as a catalyst for broader discussion. Access is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from attending or accessing discussion content. Members can see who is registered to attend in advance, with discussion recordings, supporting polls, and presentation materials online and available whenever convenient for the member. Using Peeriosity’s integrated email system, Peer MailTM, attendees can easily communicate at any time with other attending peers by selecting them from the list of registered attendees.
“iPollingTM” is available exclusively to Peeriosity member company employees, with consultants or vendors prohibited from participating or accessing content. Members have full visibility to all respondents and their comments. Using Peeriosity’s integrated email system, Peer MailTM, members can easily communicate at any time with others who participated in iPolling.
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